Should I invest in a Roth IRA or a mutual fund that I can cash out at any time without penalty?

I'm 22 years old, in the military and make 2,753 a month after taxes, including BAH. I'm in the process of saving 1500 a month for the next year for a downpayment on a house. At the same time, I'd like to begin investing. I'm wondering, since I'm young, if I should begin investing in mutual funds that I can cash out in 15 years after I pay off my first house or if I should just put my money (planning on 15% of monthly income) into a Roth IRA, so I'll have a good retirement fund? Or should I split my 15% between a Roth IRA and a mutual fund that I could cash out without penalty before retirement?

I was thinking of cashing out a PORTION of my Roth IRA at 60 and just cashing out enough to live off of every few years after that. The other mutual fund I was wanting to cash out in 10 - 20 years for a bigger house.

If you don't wan't to pay taxes, the roth IRA is the way to go. Mutual funds you do pay taxes after cashing them out.
I would do some reading on the subject and I recommend you go to Suze Orman's website, or buy a couple of her books, she is really good about retirement and that sord of investing if you don;t know what you are doing too much.

I would split it up, as long as you don't use it for 30 years.

Your first option should be to fund fully a retirement account. If you do this, and you have extra cash, then one of the best things you can do is open a DRIP Plan.

Go to : low-cost-stock-recommendations

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Click on the "DRIP's" Button on the Navigation Bar

These powerful investment plans are seldom talked about because brokers make very little money when they suggest them. Yet, they have proven to be one of the best, if not the best, long-term strategy on Wall Street.

They are perfect for small investors, as well as big investors. They are safe and allow you to not care about whether the market is going up or down. They are a must for any serious investor.

If you decide you are interested in DRIP Plans, click on the advertisement on the same page "$4 to purchase stocks". This will answer your next question, which is, How do I get started? and what is the least expensive way to get started?

I strongly recommend looking into it. They are great plans.

Good Luck

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